The current supply chain for U.S. coinage may be viewed as follows. The United States Treasury, acting as “producer,” mints new coins. The Treasury ships the coins to the U.S. Federal Reserve Branch (“FRB”) Office. The FRB, acting as “supplier,” ships the coins to banks in response to orders that the FRB receives from the banks. The FRB may accept deposits of coins from the banks. The banks, acting as “distributors,” distribute the coins to consumers or “end-users.” The end users demand that the banks provide enough coins to meet the end users' requirements.
Many banks and FRB Offices are holding excess coins in inventory and excess coin value on their balance sheets. In some instances, banks do not have the capacity to store the coins or the demand to justify the inventory.
Coin aggregators recapture coins from consumers. The coin aggregators create a market by allowing consumers to convert idle coins into cash value. The coin aggregators process the coins into usable product and deposit the coins with banks for credit.
When the coin aggregators deposit the coins with banks, the coin aggregators increase pressure on banks to store the coins. As the coin aggregators become more successful at collecting used coins, the pressure on banks to store the coins increases.
There is a large number of unused coins in circulation. It is estimated also that approximately $10-15 B worth of coins are idle and unusable in the U.S. It is further estimated that a typical U.S. household holds $90 of idle coin.
$2.5 B coins (40 B pieces) were processed by a single coin aggregator in 2007. There is a single coin aggregator that recycles more coins than the U.S. Mint produces annually. 62% of idle coins captured by a particular aggregator are pennies, which are the most difficult coin for which to find storage.
Despite the storage of unused coins by the banks, the U.S. mint may continue to produce new coins on a fixed schedule. The production of new coins is expensive. The cost to produce a U.S. Penny is $0.017. For a U.S. Nickel, the cost is $0.075. It is estimated that for 2007, these costs contributed to a loss by the U.S. Treasury of about $100 MM. The production of new coins, and the storage and redistribution of unnecessarily introduced coins consumes natural resources.
The U.S. Mint will ship to any FRB or FRB Depot. Neither the Mint nor the FRB will transport private coin inventory to meet a coin demand. For example, if a first private institution has excess coins and a second private institution has a coin deficit, neither the Mint nor the FRB will transport coins from the first private institution to the second private institution to meet the needs of the first and second private institutions.
It would be desirable, therefore, to provide apparatus and methods for reducing the amount of coins that a bank is required to store.
It also would be desirable, therefore, to provide apparatus and methods to reduce losses associated with minting new coins.
It also would be desirable, therefore, to provide apparatus and methods to reduce the number of unused and/or idle coins.